Russia: CBR to keep the Key Rate on hold - TDS

Analysts at TD Securities suggest that the consensus is for the CBR to keep the Key Rate on hold at 7.5%, but 16 out of 42 respondents to the Bloomberg survey expect a 25bps hike.

Key Quotes

“We think the decision is pretty much a coin toss, but on balance think that the CBR will stay on hold, given the stability of USDRUB since the October Board meeting and the fact that headline inflation has moved recently more or less in line with CBR forecasts.”

“We think it makes sense for the CBR to wait until the February meeting, by which time they should have an idea of the initial impact of the VAT hikes on CPI inflation - we think a 25bps hike is likely then. Aside form the rate decision the CBR is expected to announce details of a possible resumption in FX purchases next year. Governor Nabiullina will also be holding a press conference.”